JOHANNESBURG - Harmony Gold's South African operations are benefiting from increased gold production following the purchase of the Moab Khotsong mine and related assets in Orkney for R3.5 billion.
This as Harmony Gold said on Tuesday that it recorded a 19 percent increase in gold production to 10,388kg, or 333,981 ounces, in the first quarter to September 2018 when compared to the September 2017 quarter, mainly due to the addition of gold produced by Moab Khotsong.
Earlier this year Harmony bought Moab Khotsong in the North West province from AngloGold Ashanti for R3.5 billion, in a bid to become a 1.5 million ounce gold producer a year by 2019.
Moab Khotsong is South Africa's newest underground mine and has been operating since 2006, incorporating the Great Noligwa underground mine and related infrastructure.
On Tuesday, Harmony said total gold production in this year's first quarter increased by 30 percent compared to the September 2017 quarter, and decreased by two percent when compared to the June 2018 quarter.
All-in sustaining unit costs for the group increased quarter on quarter by eight percent to R526,747 per kilogram, or $1,166 per ounce, in the September 2018 quarter.
Peter Steenkamp, Harmony's chief executive, said the underground recovered grade at Moab Khotsong was expected to improve during the remainder of the 2019 financial year as mining in the middle mine section progresses.
Steenkamp also said Harmony's Hidden Valley mine in Papua New Guinea delivered an excellent safety performance, recording no lost time injuries and generated free cash flow in the first quarter since achieving commercial levels of production in June 2018, compared to a net cash outflow in the previous quarter.
"Hidden Valley and Moab Khotsong have boosted the group's production and free cash flow generation compared to the September 2017 quarter. We are confident that we will achieve our annual production and cost guidance as we continue to focus on safety, production and cost management," Steenkamp said.